Agenda item

This report provides the Finance and Economic Overview and Scrutiny Committee with the details of the Council’s provisional outturn position for the financial year. The report covers the following areas:

 
• General Fund Revenue Budget
• Housing Revenue Account Budget
• Capital Programmes – General Fund and Housing Revenue Account
• Reserves overview – General Fund and Housing Revenue Account

The Leader of the Council presented the report.

The report provided the Finance and Economic Overview and Scrutiny Committee with detail of the Council’s provisional outturn position for the financial year 2023/24. Throughout the financial year the Committee had been provided with regular and comprehensive budget monitoring reports which enabled members to be kept updated on what had been a particularly financially volatile year.

The financial year 2023/24 had been projected to be supported by use of the Budget Stabilisation Reserve (BSR) of £1.534m which was in response to an unprecedented increase in budgets relating to utilities, inflation, material and fuel costs. These budget heading increases were as a result of external events outside of the Council’s control and were considered to be temporary in their duration. In order to ensure a balanced budget was presented to Council it was recommended that the BSR was used. As this proposal was in accordance with the reserve policy, Council approved the one-off use to avoid the need to significantly reduce operating expenditure.

During the financial year, the situation gradually improved and the prudent budget increase assumptions did not materialise which had resulted in there no longer being a need for a reserve movement. This coupled with ever improving investment interest rates and therefore increasing investment income (an additional £832k General Fund during 2023/24) had resulted in an opportunity to review Budget Stabilisation Reserve and put some of the reserve balance to other uses. This is necessary due to a number of earmarked reserves being required to continue to invest in specific activities, particularly ongoing investment in the backlog maintenance of corporate assets, investment in ICT and the formation of a Flood Reserve.

One Member raised the timing of the meeting and that the report would usually be considered by the Finance and Economic Overview and Scrutiny Committee in the first instance, then to Governance and Audit and Cabinet.It was requested that this timeline be adhered to in future years.

The importance on the need of a 3-year funding settlement figure with Local Government was emphasised to allow future planning.

It was noted the report stated that financial situations had improved in 2023/24, following pressures from previous years. 

The Deputy Chief Executive highlighted that assumptions had been put into the budget in November 2022 including prudent levels of interest rate forecasts, and that assumptions were a reflection of that period.

The Stabilisation Reserve remained in place due to continued uncertainty in future funding settlements.

One Member clarified the 3-year funding was included within the new Government’s manifesto and they had ambitions for security and stability. It was likely that a 12-month settlement would be provided in November 2024 from Government, however, from 2025 it was hoped that 3-year settlements be implemented.

One Member suggested any interest rates income received be diverted over to Budget Stabilisation Reserve in the event of any unknown expenditures which may occur, for example, increased energy prices.

The Deputy Chief Executive clarified the Business Rate Volatility Reserve acted as a buffer in the same way as the Budget Stabilisation Reserve. The

Business Rate Volatility Reserve would be utilised in the event of any business rate forecast receipts not being in line without projection which would be useful in the event of any threat of service delivery risk.

Members welcomed the balanced budget presented at the AGM in May 2024 which did not solely rely on reserves.

That the Finance and Economic Overview and Scrutiny Committee review the provisional Revenue and Capital Outturn report and associated appendices for the financial year 2023/24.